3 Bonus Trends For New Physicians – 11/1/2013

Hospitals And Other Healthcare Facilities Offer Attractive Bonuses

As the population ages and healthcare organizations prepare for full implementation of the Affordable Care Act (ACA), the demand for physicians is increasing. This is great news for doctors but challenging for healthcare employers and recruiters. By many accounts, there aren’t enough physicians to go around—especially in primary care. According to a recent study by George Washington University School of Public Health and Human Services, less than 25 percent of doctors choose to become primary care physicians after completing their residencies. Hospitals and other healthcare facilities are offering increasingly attractive bonuses to snare them.

Consider the following bonus trends for new physicians. If you’re not offering similar perks, you might be losing your best candidates to competitors who are.

1. Hiring Bonuses

According to an article in Crain’s New York Business, many hospitals and other healthcare organizations are offering hiring bonuses of $10,000 and more. Last year a study by Merritt Hawkins found that the average hiring bonus was $23,000. At the time, 76 percent of employers with open positions were offering them. An employer may pay the hiring bonus upon execution of the employment contract, on the first day of work, or at predetermined intervals throughout the process to keep competitors from stealing their chosen candidate away.

2. Student Loan Bonuses

Some employers are also luring new doctors with the promise of partial repayment of their medical school loans. According to the Association of American Medical Colleges, the median cost to attend medical school for four years, including living expenses and books, is $278,455 for a private school or $207,868 for a public university. Interest continues to accrue on at least a portion of medical-school loan balances during the graduate’s residency period. This means new doctors may owe substantially more.

3. Relocation Bonuses

Other healthcare organizations offer reimbursement for designated relocation expenses and a housing allowance to cover an existing mortgage until someone buys the property. These bonuses are particularly attractive to new doctors worried about selling their homes in a tough market as they relocate. According to an article in American Medical News, the average relocation allowance was $10,719 in 2012. This is down from $12,306 in 2011. Some recruiting experts expect relocation bonuses to continue to shrink as the housing market improves. Market Watch recently reported that the number of homes under contract within two weeks rose by 39 percent.

Many doctors complete their residencies at hospitals in large metropolitan areas and decide they want to stay there. As a result, healthcare employers and recruiters in those areas have an easier time filling positions without offering bonuses. However, experts quoted in the Crain’s New York Business article believe it’s only a matter of time until big city employers have to begin offering bonuses as well. According to a survey of physicians conducted by Deloitte, 60 percent of doctors believe many of their peers will choose to retire in the next one to three years. When they do, even the largest healthcare providers are going to need to fight for the best new candidates.